Federal Register / Vol. 88, No. 243 / Wednesday, December 20, 2023 / Notices 88191 

34 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3The Exchange initially filed the proposed 

pricing changes on November 28, 2023 (SR–Phlx– 

2023–52). On December 5, 2023, the Exchange 

withdrew that filing and submitted this filing. 

4 ‘‘Specialized Quote Feed’’ or ‘‘SQF’’ is an 

interface that allows Lead Market Makers, 

Streaming Quote Traders (‘‘SQTs’’) and Remote 

Streaming Quote Traders (‘‘RSQTs’’) to connect, 

send, and receive messages related to quotes, 

Immediate-or-Cancel Orders, and auction responses 

into and from the Exchange. Features include the 

following: (1) options symbol directory messages 

(e.g., underlying and complex instruments); (2) 

system event messages (e.g., start of trading hours 

messages and start of opening); (3) trading action 

messages (e.g., halts and resumes); (4) execution 

messages; (5) quote messages; (6) Immediate-orCancel Order messages; (7) risk protection triggers 

and purge notifications; (8) opening imbalance 

messages; (9) auction notifications; and (10) auction 

responses. The SQF Purge Interface only receives 

and notifies of purge requests from the Lead Market 

Maker, SQT or RSQT. Lead Market Makers, SQTs 

and RSQTs may only enter interest into SQF in 

their assigned options series. Immediate-or-Cancel 

Orders entered into SQF are not subject to the Order 

Price Protection, the Market Order Spread 

Protection, or Size Limitation in Options 3, Section 

15(a)(1), (a)(2) and (b)(2), respectively. See Options 

3, Section 7(a)(i)(B). 

5An active port shall mean that the port was 

utilized to submit a quote to the System during a 

given month. See Options 7, Section 9, B. 

6The member organization is required to provide 

the Exchange with written notification of the 

transition and all additional ports, provided at no 

cost, will be removed at the end of the ten business 

days. See Options 7, Section 9, B. 

7The Exchange also proposes a technical 

amendment to add a comma between ‘‘per port’’ 

and ‘‘per month’’ for the SQF Port Fee in Options 

7, Section 9, B. 

8For example, a Phlx Market Maker may desire 

to utilize multiple SQF Ports for accounting 

purposes, to measure performance, for regulatory 

reasons or other determinations that are specific to 

that member organization. 

9Phlx Market Makers have various regulatory 

requirements as provided for in Options 2, Section 

4. Additionally, Phlx Market Makers have certain 

quoting requirements with respect to their assigned 

options series as provided in Options 2, Section 5. 

SQF Ports are the only quoting protocol available 

on Phlx and only Market Makers may utilize SQF 

Ports. 

10 15 U.S.C. 78f(b). 

11 15 U.S.C. 78f(b)(4) and (5). 

submissions should refer to file number 

SR–PEARL–2023–69 and should be 

submitted on or before January 10, 2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.34

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–27917 Filed 12–19–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99186; File No. SR–Phlx– 

2023–56] 

Self-Regulatory Organizations; Nasdaq 

PHLX LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Options 7, 

Section 9 

December 14, 2023. 

Pursuant to section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on December 

5, 2023, Nasdaq PHLX LLC (‘‘Phlx’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend its 

Rules at Options 7, Section 9, Other 

Member Fees.3

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/phlx/rules, at the principal 

office of the Exchange, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

Options 7, Section 9, B, Port Fees, to 

increase the SQF Port 4 Fee cap. 

Today, Phlx assesses $1,250 per port, 

per month up to a maximum of $42,000 

per month for an SQF Port that receives 

inbound quotes at any time within that 

month.5 Today, member organizations 

are not assessed an active SQF Port Fee 

for additional ports acquired for ten 

business days for the purpose of 

transitioning technology.6 The Exchange 

proposes to add the words ‘‘active port’’ 

in parenthesis at the end of the 

description of SQF Port Fee to tie the 

definition of an active port to the 

description for the port.7

At this time, the Exchange proposes to 

increase the maximum SQF Port Fee of 

$42,000 per month to $50,000 per 

month. The Exchange is not amending 

the $1,250 per port, per month fee. As 

is the case today, the Exchange would 

not assess a member organization an 

SQF Port Fee beyond the monthly cap 

once the member organization has 

exceeded the monthly cap for the 

respective month. Despite increasing the 

maximum SQF Port Fee from $42,000 

per month to $50,000 per month, the 

Exchange will continue to offer member 

organizations the opportunity to cap 

their SQF Port Fees so that they would 

not be assessed these fees beyond the 

cap. A Phlx Market Maker requires only 

one SQF Port to submit quotes in its 

assigned options series into Phlx. A 

Phlx Market Maker may submit all 

quotes through one SQF Port. While a 

Phlx Market Maker may elect to obtain 

multiple SQF Ports to organize its 

business,8 only one SQF Port is 

necessary for a Phlx Market Maker to 

fulfill its regulatory quoting 

obligations.9

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,10 in general, and furthers the 

objectives of Sections 6(b)(4) and 6(b)(5) 

of the Act,11 in particular, in that it 

provides for the equitable allocation of 

reasonable dues, fees, and other charges 

among members and issuers and other 

persons using any facility, and is not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

The proposed pricing change to 

increase the maximum SQF Port Fee is 

reasonable in several respects. As a 

threshold matter, the Exchange is 

subject to significant competitive forces 

in the market for options securities 

transaction services that constrain its 

pricing determinations in that market. 

The fact that this market is competitive 

has long been recognized by the courts. 

In NetCoalition v. Securities and 

Exchange Commission, the D.C. Circuit 

stated as follows: ‘‘[n]o one disputes 

that competition for order flow is 

‘fierce.’ . . . As the SEC explained, ‘[i]n 

the U.S. national market system, buyers 

and sellers of securities, and the brokerdealers that act as their order-routing 

agents, have a wide range of choices of 

where to route orders for execution’; 


ddrumheller on DSK120RN23PROD with NOTICES1
88192 Federal Register / Vol. 88, No. 243 / Wednesday, December 20, 2023 / Notices 

12NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. 

Cir. 2010) (quoting Securities Exchange Act Release 

No. 59039 (December 2, 2008), 73 FR 74770, 74782– 

83 (December 9, 2008) (SR–NYSEArca–2006–21)). 13Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) 

(‘‘Regulation NMS Adopting Release’’). 14For example, a Phlx Market Maker may desire 

to utilize multiple SQF Ports for accounting 

purposes, to measure performance, for regulatory 

reasons or other determinations that are specific to 

that member organization. 15Phlx Market Makers have various regulatory 

requirements as provided for in Options 2, Section 

4. Additionally, Phlx Market Makers have certain 

quoting requirements with respect to their assigned 

options series as provided in Options 2, Section 5. 

SQF Ports are the only quoting protocol available 

on Phlx and only Market Makers may utilize SQF 

Ports. 16 15 U.S.C. 78s(b)(3)(A)(ii). 

[and] ‘no exchange can afford to take its 

market share percentages for granted’ 

because ‘no exchange possesses a 

monopoly, regulatory or otherwise, in 

the execution of order flow from broker 

dealers’. . . .’’ 12

The Commission and the courts have 

repeatedly expressed their preference 

for competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. In Regulation NMS, while 

adopting a series of steps to improve the 

current market model, the Commission 

highlighted the importance of market 

forces in determining prices and SRO 

revenues and, also, recognized that 

current regulation of the market system 

‘‘has been remarkably successful in 

promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 13

Numerous indicia demonstrate the 

competitive nature of this market. 

Within this environment, market 

participants can freely and often do shift 

their order flow among the Exchange 

and competing venues in response to 

changes in their respective pricing 

schedules. 

The proposed pricing change to 

increase the maximum SQF Port Fee 

from $42,000 to $50,000 per month is 

reasonable because despite the increase 

in the maximum SQF Port Fee, the 

Exchange will continue to offer member 

organizations the opportunity to cap 

their SQF Port Fees so that they would 

not be assessed SQF Port Fees beyond 

the cap. Additionally, a Phlx Market 

Maker requires only one SQF Port to 

submit quotes in its assigned options 

series into Phlx. A Phlx Market Maker 

may submit all quotes through one SQF 

Port. While a Phlx Market Maker may 

elect to obtain multiple SQF Ports to 

organize its business,14 only one SQF 

Port is necessary for a Phlx Market 

Maker to fulfill its regulatory quoting 

obligations.15

The proposed pricing change to 

increase the maximum SQF Port Fee 

from $42,000 to $50,000 per month is 

equitable and not unfairly 

discriminatory because the Exchange 

would uniformly not assess any Market 

Makers that exceeded the maximum 

SQF Port Fee any SQF Port Fees beyond 

the maximum amount. Market Makers 

are the only market participants that are 

assessed an SQF Port Fee because they 

are the only market participants that are 

permitted to quote on the Exchange. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

Intermarket Competition 

The proposal does not impose an 

undue burden on intermarket 

competition. The Exchange believes its 

proposal remains competitive with 

other options markets who also offer 

order entry protocols. The Exchange 

notes that it operates in a highly 

competitive market in which market 

participants can readily favor competing 

venues if they deem fee levels at a 

particular venue to be excessive. In such 

an environment, the Exchange must 

continually adjust its fees to remain 

competitive with other exchanges. 

Because competitors are free to modify 

their own fees in response, and because 

market participants may readily adjust 

their order routing practices, the 

Exchange believes that the degree to 

which fee changes in this market may 

impose any burden on competition is 

extremely limited. 

Intramarket Competition 

The proposed pricing change to 

increase the maximum SQF Port Fee 

from $42,000 to $50,000 per month does 

not impose an undue burden on 

competition because the Exchange 

would uniformly not assess any Market 

Makers that exceeded the maximum 

SQF Port Fee any SQF Port Fees beyond 

the maximum amount. Market Makers 

are the only market participants that are 

assessed an SQF Port Fee because they 

are the only market participants that are 

permitted to quote on the Exchange. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act.16

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is: (i) necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) otherwise in 

furtherance of the purposes of the Act. 

If the Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

Phlx–2023–56 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to file 

number SR–Phlx–2023–56. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (https://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 88, No. 243 / Wednesday, December 20, 2023 / Notices 88193 

17 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Rule 1.5(n) (‘‘Member’’). The term 

‘‘Member’’ shall mean any registered broker or 

dealer that has been admitted to membership in the 

Exchange. A Member will have the status of a 

‘‘member’’ of the Exchange as that term is defined 

in Section 3(a)(3) of the Act. Membership may be 

granted to a sole proprietor, partnership, 

corporation, limited liability company or other 

organization which is a registered broker or dealer 

pursuant to Section 15 of the Act, and which has 

been approved by the Exchange. 

4 ‘‘Trade date’’ is the date of trading activity in 

yyyy-mm-dd format. 

5 ‘‘Total volume’’ is the total number of shares 

transacted. 

6 ‘‘Short volume’’ is the total number of shares 

sold short. 

7 ‘‘Short exempt volume’’ is the total number of 

shares sold short classified as exempt. 

8 ‘‘Symbol’’ refers to the Cboe formatted symbol 

in which the trading activity occurred. See https:// 

cdn.cboe.com/resources/membership/US_

Symbology_Reference.pdf. 

9 ‘‘Trade date and time’’ is the date and time of 

trading activity in yyyy-mm-dd hh:mm:ss.000000 

ET format. 

10 ‘‘Trade size’’ is the number of shares 

transacted. 

11 ‘‘Trade price’’ is the price at which shares were 

transacted. 

12 ‘‘Short type’’ is a data field that will indicate 

whether the transaction was a short sale or short 

sale exempt transaction. A short sale transaction is 

a transaction in which a seller sells a security 

which the seller does not own, or the seller has 

borrowed for its own account (see 17 CFR 242.200). 

A short sale exempt transaction is a short sale 

transaction that is exempt from the short sale price 

test restrictions of Regulation SHO Rule 201 (see 17 

CFR 242.201(c)). 

13 ‘‘Exchange’’ is the market identifier (Z = BZX, 

Y = BYX, X = EDGX, A = EDGA). 

14The monthly fees for the Report are assessed on 

a rolling period based on the original subscription 

date. For example, if a User subscribes to the Report 

on October 24, 2023, the monthly fee will cover the 

period of October 24, 2023, through November 23, 

2023. If the User cancels its subscription prior to 

November 23, 2023, and no refund is issued, the 

User will continue to receive both the end-of-day 

and end-of-month components of the Report for the 

subscription period. 

15An Internal Distributor of an Exchange Market 

Data product is a Distributor that receives the 

Exchange Market Data product and then distributes 

that data to one or more Users within the 

Distributor’s own entity. See Cboe EDGA U.S. 

Equities Exchange Fee Schedule. 

16An External Distributor of an Exchange Market 

Data product is a Distributor that receives the 

Exchange Market Data product and then distributes 

that data to a third party or one or more Users 

outside the Distributor’s own entity. See Cboe 

EDGA U.S. Equities Exchange Fee Schedule. 

Washington, DC 20549, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–Phlx–2023–56 and should be 

submitted on or before January 10, 2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–27927 Filed 12–19–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99184; File No. SR– 

CboeEDGA–2023–021] 

Self-Regulatory Organizations; Cboe 

EDGA Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend Its 

Fee Schedule To Provide a Discount 

on the Purchase of Historical Equity 

Short Volume and Trade Reports 

December 14, 2023. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on December 

1, 2023, Cboe EDGA Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘EDGA’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Cboe EDGA Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘EDGA’’) proposes to 

amend its Fee Schedule. The text of the 

proposed rule change is provided in 

Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://markets.cboe.com/us/ 

equities/regulation/rule_filings/edga/), 

at the Exchange’s Office of the 

Secretary, and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to update its 

Fee Schedule to provide a discount on 

fees assessed to EDGA Members 

(‘‘Members’’) 3 and non-Members that 

purchase $20,000 or more of U.S. Equity 

Short Volume and Trades Reports 

(‘‘Short Volume Reports’’), effective 

December 1, 2023 through December 31, 

2023. 

By way of background, the Short 

Volume Report is an end-of-day report 

that summarizes certain equity trading 

activity on the Exchange, including 

trade date,4 total volume,5 short 

volume,6 and sell short exempt 

volume,7 by symbol.8 The Short Volume 

Report also includes an end-of-month 

report that provides a record of all short 

sale transactions for the month, 

including trade date and time (in 

microseconds),9 trade size,10 trade 

price,11 and type of short sale 

execution,12 by symbol and exchange.13

The Short Volume Report is a 

completely voluntary product, in that 

the Exchange is not required by any rule 

or regulation to make this data available 

and that potential customers may 

purchase it on an ad-hoc basis only if 

they voluntarily choose to do so. 

Cboe LiveVol, LLC (‘‘LiveVol’’), a 

wholly owned subsidiary of the 

Exchange’s parent company, Cboe 

Global Markets, Inc., makes the Short 

Volume Report available for purchase to 

Users on the LiveVol DataShop website 

(datashop.cboe.com). Both the end-ofday report and end-of-month report are 

included in the cost of the Short 

Volume Report and are available for 

purchase by both Members as well as 

non-Members on an annual or 

monthly 14 basis. The monthly fee is 

$750 per Internal Distributor 15 and 

$1,250 per External Distributor.16

Additionally, the Exchange offers 

historical reports containing both the 

end-of-day volume and end-of-month 

trading activity. The fee per month of 

historical data is $500. The Short 

Volume Report provided on a historical 

basis is only for display use 

redistribution (e.g., the data may be 

provided on the User’s platform). 


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